B V BHATTA Vs. STATE OF MADRAS

JUDGEMENT

(1.) FOR the assessment year 1959-60, the assessee (revision petitioner before us), a dealer in radios and electrical goods at Singaratope, tiruchirapalli, was assessed inter alia for the following items of turnover, which are now in dispute :- Rs. np. 1. Second sales of radios bought from customers in 1959-60. . . 14, 924-73

(2.) PHOTO house studio receipts. . . 2, 023-30 During the year of assessment, under item 5 of the First schedule to the Madras General Sales Tax Act, 1959, radios were assessable at the point of first sale in the State at the rate of 7 per cent. The assessee was able to show the prior history of his transactions in second-hand radios, from which it appeared that Rs. 4, 619 represented really second sales. But in regard to the balance, he was unable to substantiate his contention, and therefore he was assessed as the first dealer in respect of the balance. This is item (1) above. In regard to the second item, the contention of the dealer (assessee) was that they were only contracts for work and labour and not sales of goods, and, therefore, not assessable to tax. The Joint Commercial Tax officer, the Appellate Assistant Commissioner and finally the Sales Tax appellate Tribunal, who examined the claim of the assessee at the several stages of assessment, appeal and further appeal, disallowed his claim and the assessee has come to this Court in revision.

(3.) THE transaction in the above case was, therefore, treated as a sale. Benjamin on Sale (eighth edition) has referred to the early English decisions and observed that "the dividing line will be in many cases a difficult one to draw. THE rule suggested in Lee v. Griffin 1861 (30) LJQB 252) by blackburn, J. , may have been a simple and clear cut principle, but life is not clear cut and is not in such water-tight compartments as the universal application of such a rule would require". THErefore, the learned commentator observed that" not merely the result of the contract but the intention of the parties must be considered. Was the purpose and intention of the parties to transfer a chattel (when made) or to employ labour and materials to produce a result " THE difference may perhaps be illustrated by a man who goes to an artist and says :'paint my portrait'and one who goes into an artist's studio or an art shop and says'sell me a picture'. " *